PICTURE, IF YOU WILL, the following scenario: Battle rages in a dusty city, once a bustling seaport. Workers scatter in all directions, seeking cover from the eruptions of automatic weapons fire. On one side stands an armed brigade of angry men under the command of powerful outlaw commanders seeking to stake out their turf in a restive province. On the other side stands a phalanx of stern-faced soldiers, grimly working to restore central control over this crucial site. In the background, the sound of fighter jets is still faintly audible over the roar of the fire now consuming the storage facilities that once held valuable goods destined for the export market.
Sounds like an action sequence from a Hollywood movie, doesn’t it?
It’s not. Instead, it’s a slightly melodramatic description of something that actually happened at Ras Lanuf, one of Libya’s biggest crude oil export terminals. In mid-June 2018, the facility was rocked by fighting between rebel forces alleged to be under the command of Ibrahim Jadhran, the leader of a militia group that helped oust the country’s former leader Muammar Gaddafi, and members of the Libyan National Army (LNA) under the command of Field Marshal Khalifa Haftar, who controls most of eastern Libya. The episode left Ras Lanuf, already reeling from previous battles, in shambles.
The consequences of this event went beyond the damage inflicted upon the battlefield. The fighting led Libya’s National Oil Corporation (NOC) to declare force majeure on loadings from Ras Lanuf and Es Sider, another terminal on the country’s eastern coast. NOC Chairman Mustafa Sanalla told reporters on June 19, 2018, that the rebels had set fire to several large oil storage tanks and then stalled NOC’s efforts to extinguish the blaze. This caused “catastrophic damage” to the terminal and effectively cut Libya’s petroleum output by 400,000 bbl/d, he stated.1
Meanwhile, other observers were even more pessimistic than Sanalla. One source told Reuters that the clashes in Ras Lanuf and Es Sider had reduced Libya’s production capacity by 425,000 bbl/d, and another put the figure closer to 450,000 bbl/d. These are not small numbers, especially since Libya was producing a bit more than 1 million bbl/d at the time.2
True, the LNA did retake the ports relatively quickly. It also moved swiftly to bring the terminal facilities back online so that Libyan crude output could move back up to its former level.3 But it lost a substantial sum of money during the week or so when loadings were suspended and oil could not be sold at the usual rate. It also lost a certain amount of credibility, since the attacks raised questions about its capacity to retain control of infrastructure that plays a crucial role in Libyan oil exports. It also drew attention to its own peculiar position, namely, that of retaining control over the majority of Libyan territory without ever gaining international recognition.
And this brings me to the point of this chapter: security. I strongly believe that if Africans want to make the most of this continent’s natural resources, they will have to make stability and safety a high priority.
I can’t emphasize this point enough: African countries simply must do more to address political and civil discontent in areas where oil and gas producers are active. If they don’t, they will run the risk of alienating investors and losing access to funds. They may have to postpone or cancel work on vital infrastructure such as pipelines and cross-sector initiatives such as gas-to-power projects. Even worse, they could stymie efforts to develop the capacity of local actors, including Africa-based companies involved in oil and gas extraction, field services, trading, transportation, construction, and other related industries.
I know these concerns are valid because I’ve seen things like this happen again and again. So has C. Derek Campbell, the CEO of Energy & Natural Resource Security, Inc., a U.S.-based company that offers security solutions for oil and gas operators. When I told Mr. Campbell about my plan to write this book, he had quite a bit to say about the necessity of preparing for a crisis.
“Government- and commercially-owned energy systems are quickly becoming principal targets for terrorists, rogue organizations and hostile states, all while being exposed to natural disasters,” he wrote in a March 2019 email to me. “Protecting and improving the resilience of energy systems mandates vigilance, contingency planning, and training—ultimately requiring energy stakeholders to be actively engaged in the protection of their critical energy infrastructure and natural resource assets.”
Campbell also stressed that African oil and gas producers could not isolate themselves from the impact of civil unrest or conflicts, especially since future security issues are likely to intersect with efforts to expand the use of new technologies in the industry.
“Security threats, physical and cyber, pose an immense threat to all major sectors of the oil and gas value chain. This is largely due to the fact that the sectors are not independent verticals. They overlap and are interdependent. A physical or cyber-attack on an upstream asset can cause operational challenges [in the] midstream [sector] that can cause financial catastrophes at the downstream end,” he wrote. “The same is true in reverse: A downstream physical or cyber-attack can disrupt midstream operations and bring upstream activity to a halt for a producer. The same scenario can be applied to power assets—generation, transmission, and distribution.”
Campbell was speaking in general terms, but I’d like to take a closer look at the security challenges we’re seeing across the continent—and start looking at ways to address them.
For Bubaraye Dakolo, coughing fits are part of life in the Niger River Delta. That’s what he told DW in 2017 when he described the impact of gas flaring near his small village near Yenagoa in the Niger Delta, which accounts for the biggest share of Nigeria’s crude oil output. “Suddenly everything smells like gas,” said Dakolo, head of the Ekpetiama clan. Sometimes he and his neighbors can barely breathe, he added.4
Gas flaring, which can cause flames to shoot as high as 10-story buildings, is a regular practice at oil fields in the Delta region. Producers do it because it’s easy—and because they’d rather not bother with the gas they find in their wells. But flaring has sometimes made it difficult, or impossible, for local farmers to grow crops. And it has clearly impacted residents’ quality of life and health.5
Government leaders have repeatedly promised to address the problem. Nevertheless, flaring continues. This is one of the many reasons that some residents of oil-producing areas have come to feel that they have no options—and have been stealing crude (a practice known as “bunkering”) and damaging oil-industry assets such as pipelines. This theft has far-reaching consequences. In 2017, Maikanti Baru, the group managing director of Nigeria National Petroleum Corporation (NNPC), said that the vandalism of the country’s pipelines had reduced the amount of oil flowing to market by 700,000 bbl/d in the previous year.6 In turn, these incidents have fostered widespread corruption and theft throughout the industry.7
But it’s not just about thievery and the loss of output. After all, oil stealing is not unique to Nigeria; it also has been a problem in Ghana, Uganda, Morocco, Thailand, Russia, and Mexico, among other countries. It’s sometimes a matter of life and death. On occasion, outraged Delta residents have resorted to more violent actions against oil industry personnel. A few militant groups have even kidnapped and killed oil company employees.8
Desperate acts such as these arise from the frustration that wells up in places when a select few elites benefit from oil revenue while individuals and communities are left to deal with the damage that comes along with oil production.
And flaring isn’t the only type of environmental assault that has generated anger in the Niger River Delta area. There were more than 12,000 spills in the region between 1976 and 2014. These incidents devastated the area’s fishing industry and posed additional health and quality of life concerns.
Yamaabana Legborsi, 32, recently told CNN how the spills affected his childhood in the Gokana community. “We could not play in the sand like other children [because we were] covered in black crude. My mother was especially worried it was not safe, [and] so were other parents. We could not also eat the fishes that washed away from the river. You would see crude all around the water,” he said.9
I am not for a second saying that theft, vandalism, and violence are acceptable responses to the difficulties facing the people of the Delta. In fact, in some cases, these acts have worsened the situation. While more than half of the spills reported between 1976 and 2014 were caused by pipeline corrosion and tanker accidents, the rest were a result of mechanical error and sabotage, the Journal of Health and Pollution reported last year.10
How can we begin to turn this situation around? Like most complex problems, it will require a complex, multi-pronged solution. Part of that solution should include economic diversification efforts.
Nigeria’s Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, recently said that the Ministry of Petroleum Resources intended to develop a policy that would encourage people living in oil-producing areas to form cooperatives, which would then be able to set up and own modular refineries.11 That’s a start, but the people of the Delta have heard the government make promises before. It will take real action, as well as programs with the potential to impact large portions of the population, to make a difference.
Africans will also need to combine efforts to create job opportunities and economic growth with practical steps to prevent and mitigate environmental damage in the Delta. That’s why I’m excited about the work of Eucharia Oluchi Nwaichi, who is looking for sustainable ways to undo the damage created by oil spills. In March 2019, Chemistry World noted that Nwaichi, an environmental biochemist at the University of Port Harcourt, was conducting research on phytoremediation, a method that uses plants and microbes to break down and eliminate environmental contaminants.
Chemistry World also reported that she and her students were working to establish close relationships with residents of the Delta communities that have borne the brunt of the environmental assaults on the region. Without this effort, she said, researchers and government officials cannot count on building up local support for interventions, even if the new methods hold out the promise of restoring the land for agriculture.12
We also can follow the creative example of Sustainability International (SI), a U.S. nonprofit organization that is working with the village of K-Dere in Ogoniland to clean up an oil spill at a fish farm and using cryptocurrencies to pay workers. In 2017, the NGO hired local women, as well as former members of militant groups, to clean up an oil spill at a fish farm in the Gulf of Guinea. The venture-funded project was successful, and not just because it achieved its aim of cleaning the fish farm, but also because it trained workers in the use of the technologies needed to gather operational data.13
Chinyere Nnadi, the co-founder and CEO of SI, told The Huffington Post in 2017 that the cleanup was designed to make participants feel empowered and in control of their economic lives. “Community members previously had no way to break the cycle of government and corporate corruption that has imprisoned their citizens in their polluted tribal lands,” he explained. “With SI, we give each citizen the choice to put down their guns and pick up their cell phones, giving up bullets and picking up Bitcoin. This transforms each person from economic prisoner into an entrepreneur who earns a living by doing good for their community and their local environment.”14
Of course, we can’t—and shouldn’t—expect NGOs to carry the whole load. Oil companies, other businesses, and local authorities must play a large role in mitigating environmental damage and addressing the other factors contributing to oil theft and vandalism. And there has been some action on this front. I was happy to learn in March 2019 that Henry Seriake Dickson, the governor of Bayelsa, had founded a commission to conduct an inquiry into oil spills in the Niger Delta. John Sentamu, the Archbishop of York, has promised that the probe will look into the “environmental and human damage” affecting oil-producing areas.15
We also need to see national governments help each other address theft, and fortunately, there are some examples of positive cooperation. For example, when the Panamanian oil tanker MT Maximus was hijacked by Nigerian nationals off the coast of Côte d’Ivoire in February 2016, the navies of Ghana, Togo, and Nigeria, together with the U.S. and France, tracked the vessel to the waters of São Tomé e Príncipe and intercepted it.
“With the blessing of the São Toméan government, Nigerian Navy special forces performed an opposed boarding of the Maximus. The pirates were arrested (though one was shot and killed), the Maximus crew were freed, and the cargo recovered,” states the Atlantic Council report.16
Technology should be part of the solution, as well. As I mentioned, there are innovative technologies with the potential to address environmental concerns.
Technology also can be used to discourage theft. We’re already seeing that in Ghana’s Petroleum Product Marking Scheme. This program mandates the use of identifying markers in refined fuels as a means of combatting theft, which had become a wide-ranging problem.
In 2017, a representative of the country’s National Petroleum Authority described the scheme:
“The most promising means of combating fuel theft and diversions . . . is fuel ‘marking.’ Fuel marking has been around in one form or another for some time, but in recent years, covert molecular fuel markers have been developed that are virtually impossible for thieves to detect. Such markers allow stolen or diverted fuel to be identified and recovered, and perhaps more importantly, used as admissible scientific evidence to prosecute fuel thieves and smugglers in courts of law. One of the most successful programs to date is Ghana’s Petroleum Product Marking Scheme, instituted by the country’s National Petroleum Authority in 2013. The program allows inspectors to determine if the gasoline or diesel sold at filling is legal and offenders are subject to being fined or jailed.”17
We also need to encourage locals to be part of the solution in areas where oil thefts and vandalism take place. One promising example is NNPC’s plan for commercialization of associated gas that might otherwise be flared from Niger River Delta wells. The company’s group managing director, Maikanti Baru, said in April 2019 that NNPC intends to set up partnerships that would allow local communities to benefit from the use of gas for economic development projects.
“For us as operators, we will continue to dialogue with the bodies so as to create [an] enabling operating environment for the [oil companies] and for the communities,” he said at a ceremony marking the start of his position as the national leader of Host Communities of Nigeria (HOSTCOM).18
African leaders got a tragic reminder of the need to pay attention to security issues in January 2010, when Angolan gunmen opened fire on a visiting football team from Togo. Several days later, a plane brought the living and dead back to their home country. A group of women, loved ones of the victims, threw themselves on the ground in anguish. They were not the only ones to feel the pain and devastation that separatist groups have sown in Angola.
“Our boys went to Angola to celebrate the best in African football, but they came back with dead bodies and bullet wounds,” Togbe Aklassou, a traditional ruler from Togo’s capital, Lomé, said shortly after the attack.19
This was one of many troubling examples of violence to take place in Angola since 2000, and just one of many acts by separatist groups seeking independence for Cabinda, an oil-rich province separated from the rest of Angola by a thin strip of territory belonging to the Democratic Republic of Congo.
More recently, in May 2016, five men claiming membership in the Front for the Liberation of the Enclave of Cabinda (FLEC) reportedly climbed aboard an offshore gas platform operated by Chevron and demanded that foreign workers leave or face the consequences.20 No further raids on the platform were reported, but separatist groups did intensify their efforts against the Angolan armed forces in subsequent months.21
Events of this type are a thorn in the side of Angola’s government. So far, its strategy for limiting rebel activity has involved maintaining tight control over Cabinda while placing few constraints on the activity of investors in offshore oil and gas reserves.22 The province of Cabinda also restricts access to visitors by requiring special permits, and it tasks soldiers with protecting construction sites along the coast and the fenced-in compounds where foreign oil company employees live. This strategy has helped keep conflict at relatively low levels, but it has also strained the capacity of the armed forces.
Meanwhile, Angola is not the only African state that has had to decide how to respond when violence threatens oil and gas production.
Look at Mozambique, for example. Several years after the discovery of massive gas reserves in the Rovuma Basin off the coast of the northern Cabo Delgado province in 2010, the country saw an uptick in civil conflict. By late 2017, a militant Islamist group known as Al Sunnah wa Jama’ah had begun staging assaults on villages near the installations and campsites occupied by men working for Anadarko, the U.S. company that was the first to invest in the Rovuma Basin, and its contractors.23
In June 2018, Anadarko responded to worsening conditions by imposing a lockdown on workers at the site of a gas liquefaction plant in Palma. Attacks have continued since then, and an employee of Anadarko, Gabriel Couto, was reportedly beheaded in March 2019.24
The Mozambican government has responded to such incidents by taking a harsh approach to Al Sunnah wa Jama’ah. In mid-2018, the commander of one military unit said his soldiers were ready to kill suspected militants on sight. Meanwhile, Anadarko and other investors, such as Italy’s Eni, beefed up security measures for their personnel. In fact, Anadarko indicated in a 2019 advertisement that it was looking to buy armored vehicles capable of withstanding hits from AK-47 automatic rifles. Of course, now that Chevron has purchased Anadarko, it has inherited the opportunities and challenges in Mozambique.25
Then there’s Nigeria. In addition to the ongoing pattern of oil resource theft and vandalism mentioned above, the country is home to what has been described as the world’s deadliest militant group: Boko Haram. The group has launched an insurgency that has, according to United Nations estimates, led to the internal displacement of 1.7 million people and the killing of more than 15,200 people since 2011.26
Nigerians also live with the constant danger of killings and kidnappings by bands of thieves such as the Zamfara bandits. This group often targets and kidnaps poor land farmers—and then murders them when their relatives cannot afford the ransom. In April 2019, security experts reported this group had killed 200 people in a period of just a few weeks.27
I realize that the battle against violent groups and gangs is likely to continue for some time. But Africans will have a much better chance of success if they seek to address the problems that make them vulnerable to these groups in the first place. Governments must work harder to address the issues that help violent groups recruit new members because. After all, these are the reasons people feel hopeless and disenfranchised. They also need to take an honest look at the gap between the wealth that their petroleum resources have generated and the impoverished populations of the regions where oil and gas are produced.
In 2017, my company, Centurion Law Group, successfully negotiated one of the biggest and most difficult deals in African oil and gas to date. It concerned a project in South Sudan, where we were working with that country’s government and Nigeria’s Oranto Petroleum to open the door for exploration work at Block B3.
The exploration and production-sharing agreement (EPSA) that resulted from those negotiations allowed Oranto to begin comprehensive exploration and long-term development. This was a significant development, not only because the EPSA was the first to be signed in South Sudan since 2012, but also because it signaled a renewal of hope. The idea was this: If we can succeed here, we can succeed anywhere on the continent.
You will recall that at that point, South Sudan had already experienced years of civil conflict. Tensions began building long before the country achieved independence from Sudan. They dated back to the 1970s, when vast oil reserves were discovered in the southern part of Sudan. All of the oil extracted there went to the pipelines and refineries that Khartoum built in the north, perhaps in an attempt to prevent secession.28 The northern and southern regions of the country could not agree on how to share oil revenues, and this led to fighting. Eventually, in 2011, Sudan split into two separate nations.
The southern part, now known as South Sudan, remains one of Africa’s least-developed countries.29 But in 2017, the new country’s government renewed its commitment to economic revival through investments in utilities and infrastructure, particularly in the oil and gas sector.
Since that time, I’ve continued to support South Sudan as executive chairman of the African Energy Chamber. In early 2019, the chamber entered into a technical assistance cooperation agreement with the South Sudanese Ministry of Petroleum with the aim of strengthening the country’s capacity to manage its hydrocarbons sector and wealth. And later in 2019, the chamber launched a global investment drive for South Sudan, expressing its confidence that the country could achieve lasting peace.30
Even so, I understand there is still a lot of work to be done to build long-lasting stability in South Sudan.
When this young country gained independence in mid-2011, it had high hopes of turning the oil deposits that had previously filled the coffers of Khartoum into a reliable source of income. So far, though, it has not been able to sustain peace. As a result, the hydrocarbon sector has not reached its full potential. Conflict has caused a number of oil fields to stop producing, reduced the volume of petroleum available for export via pipeline, stemmed the largest stream of money flowing into the state treasury, and complicated negotiations over the building of new infrastructure.31 It has also discouraged new investors from signing on to efforts to stabilize crude production32 and has slowed the process of developing and implementing a new legal framework covering subsurface resources.33
There have been signs of hope since the signing of a peace deal between President Salva Kiir and rebel warlord Riek Machar in September 2018. This development has led serious investors to take a new look at the country, which does possess the third-largest oil reserves in sub-Saharan Africa. In December 2018, Juba secured pledges for more than $2 billion worth of investment, with Malaysia’s Petronas and Nigeria’s Oranto Petroleum (the same company I mentioned above) teaming up with a local player, Trinity Energy, to spend $1.15 billion on an oil block and the government-backed Strategic Fuel Fund of South Africa offering $1 billion for the construction of a new refinery and pipelines.
Despite these positive signs, the road ahead is likely to be long and bumpy. South Sudan’s current legal regime has been in place since 2013 and may need to be tweaked in order to ensure the safety, transparency, and stability of oil industry operations under the new government. At the same time, the country is still heavily dependent on investment from China National Petroleum Corporation (CNPC), whose management team in Beijing may balk at reforms that do not uphold the company’s interests.34
Meanwhile, the new government’s stabilization efforts will have to address the fact that a significant portion of the country’s oil infrastructure sustained damage during the civil war. These losses have not only compromised the safety and security of the civilian population in crude-producing areas but have also given rise to many spills, leaks, and other environmental hazards. The Ministry of Petroleum has made these stabilization efforts a key priority.35
And as bad as that is, I’m even more dismayed to hear about the human rights violations that have been reported in South Sudan, including acts of murder and rape.36
While putting an end to atrocities like these will take a concerted effort by government and military leaders, I do believe that economic stability must be front and center of the peace and recovery efforts of South Sudan. That’s why I want to see South Sudan’s leadership open up new blocks to exploration, especially to African investors. It’s time to build refineries, pipelines, urea, ammonia and fertilizer plants, power plants, and large agricultural fields. It’s also time to set up technology hubs!
In the end, it is business that creates jobs and hope. South Sudan and other African countries don’t need aid; they need economic revival and enterprise. Our leaders need to understand this. We cannot afford to think small in our drive for peace, investment, and stability when what we really need are big, pragmatic, common-sense solutions.
I truly believe that revenues from petroleum and related industries could make a valuable contribution toward economic revival in many of the African countries struggling with instability.
This could be true for Sudan, too. As I wrote this book, the future of the country remained very much in doubt. The uncertainty stems from events in April 2019, when President Omar al-Bashir was removed from power, and the Transitional Military Council took control. Mass protests followed as Sudan’s people demanded a civilian government.
Because of this upheaval, the Sudanese petroleum industry is likely to have difficulty attracting much in the way of foreign investment any time soon, at least until the instability in the country is resolved. This is a problem, given that Khartoum is still reeling from the loss of oil fields to South Sudan in 2011.
Ideally, Bashir’s removal will lead to the establishment of a permanent government. Once a new and stable regime is in place, Sudan will hopefully be able to use its natural resources to contribute to long-term peace and economic growth.
I wish I could offer a formula for eliminating the different forms of violence plaguing African nations with petroleum resources. Obviously, there are no one-size-fits-all solutions.
But, on a general level, I’m convinced that solutions must combine multiple factors: better governance and law enforcement, greater accountability for oil and gas companies, outside-the-box technological innovation, economic development—and above all, meaningful responses to the grievances that leave people feeling overlooked and hopeless.
Giving people more control over a share of the massive revenues that oil and gas generate would go a long way in that regard. We must ensure that people realize significant benefits from the oil and gas industry, not just experience the downsides of production.